Since the passage of federal tax legislation, a great deal of consternation has ensued about the 199A provision for cooperatives authored by Senators Hoeven and Thune. In oversimplified terms, producers who sell to a cooperative may deduct 20% of gross receipts from their business income compared to a 20% deduction against net income for sales to private firms.

GGC members are wondering if Method A deliveries qualify under this provision. The answer is NO.Because GGC is formed as a MN 308B cooperative, our tax identify is that of a partnership that does not qualify under this provision.

It is unclear if this tax law, with unintended consequences, can be resolved any time soon. Cooperatives want similar treatment to the older 199 provision AND parity with a 40% corporate tax cut to private entities. Stakeholders are meeting, but as of this time, no agreement has been reached.

If a fix can be agreed to, it must then be attached to legislation that passes both houses of Congress – a somewhat difficult task. Meanwhile, a great deal of market disruption and ‘sham’ coop development may occur.

Upcoming Events

Golden Growers Cooperative

Golden Growers Cooperative (GGC) currently has about 1,600 members and owns 49% of ProGold LLC in partnership with American Crystal Sugar Company, and ProGold owns a corn wet-milling plant near Wahpeton, North Dakota.